The Birch Group acquires four-building Short Hills portfolio for $255M

Linda Lindner//April 20, 2021

The Birch Group acquires four-building Short Hills portfolio for $255M

Linda Lindner//April 20, 2021

In one of the largest recent commercial deals in New Jersey, The Birch Group on April 20 announced it acquired a prominent four-building portfolio in Short Hills for $255-million. The off-market acquisition comes on the heels of the company’s recent $77-million portfolio purchase in Morristown.

The 843,300-square-foot portfolio comprises four Class A office buildings located at 51, 101, 103 and 150 JFK Parkway.

Cushman & Wakefield represented the seller, Mack-Cali Realty Corp., in the transaction, and is also being retained by The Birch Group as the exclusive office leasing agent for the properties. With the acquisition, The Birch Group has now acquired more than $750 million of commercial office assets since 2019.

“This portfolio offers a unique opportunity to reposition historically high-performing properties back to best-in-class assets, which is a hallmark of The Birch Group’s strategy. Short Hills is known for its incomparable prestige that manifests in heightened expectations among the regional tenant base,” said The Birch Group Chief Executive Officer and founder Mark Meisner. “A one-size-fits-all approach to asset management doesn’t work in this submarket, and our focus will be on enacting tailored improvement strategies to create enduring value for our tenants and investors alike.”

51 JFK Parkway, Short Hills. - THE BIRCH GROUP
51 JFK Parkway, Short Hills. – THE BIRCH GROUP

The portfolio, which represents The Birch Group’s first foray into the Short Hills submarket, has a storied history of attracting and retaining blue-chip tenants. Currently 80% leased to 22 tenants, The Birch Group targeted the portfolio as a unique repositioning opportunity. The properties’ quality and Short Hills address have drawn the likes of Citibank, Investors Bank, KPMG, Bank of America, UBS, Dun & Bradstreet, Morgan Stanley and Wells Fargo — all current tenants.

Situated directly off Route 24, the properties offer regional connectivity to the Garden State Parkway, Interstate 78 and the New Jersey Turnpike. The buildings are further complemented by an expanding, walkable mixed-use amenity base that includes convenient access to the high-end Mall at Short Hills, a 4-Diamond Hilton Hotel, Canoe Brook Country Club and The Upton, a recently completed upscale residential development by Roseland Residential Trust.

“During the pandemic, there has been a demographic shift to the suburbs and the migration of this talent pool represents an extraordinary opportunity to meet the demand for high-quality office assets in prime New Jersey markets,” Meisner added. “Short Hills is among one of the most prestigious suburban locales and it has consistently achieved above average rents in New Jersey, while maintaining the highest occupancy rates within the market.”

The Birch Group will employ its unique value-add strategy for the portfolio, complementing $15.2 million of recently completed renovations at the properties by previous ownership, in addition to a newly constructed parking deck at 150 JFK Parkway. To this end, The Birch Group tapped world-renowned commercial design firm Gensler to lead the design enhancements.

Each of the properties are located in the high-growth Route 24 Corridor, which is ideally situated near affluent residential communities including Short Hills, Millburn, Summit, Livingston, Chatham and Florham Park.

“These properties are situated within proximity to New Jersey’s most highly sought-after residential areas, which has long enabled them to attract a nationally recognized roster of blue chip tenants,” said David Bernhaut, executive vice chairman of Cushman & Wakefield of New Jersey Inc. “The Short Hills cache has been instrumental in attracting wealth management, consulting, accounting and legal firms, as well as the headquarters of Dun & Bradstreet and Investors Savings Bank. These companies have chosen Short Hills due to its unparalleled local and regional highway access, proximity to private country clubs, high-end hospitality, and other conveniences that you simply can’t find in other submarkets.”